KKR Acquires Atlanta Last-Mile Facility
- Sep 11, 2020
A joint venture of Hardie Real Estate Group and Palatine Capital Partners has sold Atlanta Last-Mile Center, a 205,500-square-foot industrial asset in Atlanta. JLL Capital Markets marketed the fully leased property on behalf of the joint venture and arranged its sale to KKR in a $21.7 million transaction.
Atlanta Last-Mile Center is the type of industrial asset that has become quite popular with the investment community in the current environment. “[We had a] very successful response from the market,” Britton Burdette, managing director with JLL Capital Markets, told Commercial Property Executive. “Demand is extremely high for well-parked, last-mile infill facilities that are near population centers and extensive logistics networks, which this property has. We had slightly more offers from a variety of investor types.” JLL Capital Markets’ Matt Wirth, Pete Pittroff, Dennis Mitchell, Mitchell Townsend, Crosby Taylor and Stephen Bridges joined Burdette in representing the seller.
Located on 30 acres at 2750 Sullivan Road across from Hartsfield-Jackson International Airport in the College Park area, Atlanta Last-Mile Center first opened its doors in 1972 and once served as home to Levitz Furniture. The property has since evolved, most recently through a $5 million capital improvement program that the joint venture executed in 2016, leaving the asset with an additional 37,200-square feet of space and various upgrades. Today, the two-story facility is 100 percent leased to two tenants, including Amazon.
Highest price per square foot
The sale of Atlanta Last-Mile Center at approximately $105 per square foot marks one of the highest-priced per square foot industrial trades in metropolitan Atlanta since the pandemic took hold in the U.S. in March of this year. Black Creek Group’s acquisition of Clayton Commerce Center at $60.7 million, or $76 per square foot, marked the largest Atlanta-area industrial sale of the second quarter, according to a report by Avison Young. In July, Hennessy Automobile Group purchased the building at 5849 Peachtree Road for $20.3 million, or approximately $99 per square foot.
Rising demand on the horizon
As JLL Capital Markets notes in a press release, with the rise of e-commerce, finding lower coverage opportunities close into the city at a market basis like Atlanta Last-Mile Center will be harder to identify as time goes on—a dynamic that will have a notable impact on market fundamentals. “We expect cap rates to continue to compress for these types of investments,” said Burdette. “With available land striking and some industrial on the interior of cities being converted to other uses we will see a tightening of vacancies and thus above average rent growth.”
The increase in e-commerce activity is also destined to leave a permanent mark on the national industrial sector, according to JLL Capital Markets. “We see low-coverage/highly parked last-mile facilities as a new emerging class of industrial in the market today,” Burdette added. “We will see many companies requiring properties of this type to facilitate next day and same day deliveries.”